Thanks to the massive expansion of eCommerce stores and online shopping, the online payment processing industry is growing rapidly. Owners strive to integrate different methods of payment into their websites while at the same time providing fraud protection.
As a response, payment processing providers rely on machine learning and user data in order to anticipate customer needs, identify payment trends, and customize payment.
In this post, we’re discussing 5 top online payment trends and analyzing their impact on both merchants and customers.
As mobile payments, credit cards, and digital payments continue to increase in popularity, there is also a necessity for better security and protection against cybercrime and fraud.
Financial institutions and payment processing companies are increasingly using machine learning and artificial intelligence to protect customer data and prevent fraud. Biometric authentication for transactions is one of the newest technologies for secure payment processing estimated to support over 18 billion payments this year.
Many banks and payment processors also rely on bulk WHOIS lookup to detect transaction fraud as it contains domain ownership data that might help notice discrepancies with the domain records of legitimate entities.
For instance, it can help identify credit card fraud by flagging possible fraudulent sites and users, detect the legitimacy of a site when you’re directed to it via an online ad, or check what country a domain is registered in.
In addition, private companies and governments are working together to develop a regulatory framework that will improve payment traceability, combat transaction risk, and increase fraud protection.
Buy Now, Pay Later
In the current consumer climate, shoppers increasingly gravitate towards alternative payment methods. One of the most popular ones is the ‘buy now, pay later (BNPL)’ service, which allows them to own an item before the entire payment is completed.
According to Forbes, the percentage of Gen Z-ers using this service in the States has grown from 6% in 2019 to more than 35% in 2021. Millennials’ use of the service has reached over 40%, and even Boomers are getting into the act, with 18% of them using BNPL.
This payment method is an excellent way for merchants to move big-ticket items and encourage customers to make a purchase. Services like Afterpay and Sezzle enable BNPL functions for retailers.
In 2019, the Federal Reserve reported that cash had lost its position as the most popular payment method. Cash is the third most preferred payment method at the moment, with 22% of people reporting it as their primary way to pay for services and goods.
These days, debit and credit cards are becoming commonplace as a result of the influx of younger consumers.
Businesses of all sizes and industries should be quick to catch up by introducing different payment methods, whether online or at the checkout counter. On the other hand, companies that have customers who are already paying in cash should consider introducing cash discount programs.
E-Wallets and Cryptocurrencies
Just one year after Apple launched its smart wallet technology Apple Pay in 2014, other big brands like Google, Samsung, and PayPal also adopted this technology. By 2017, nearly 40% of US consumers were using e-wallets.
Experts estimate that mobile payment volume will reach over $500 billion by 2022, which means that businesses that haven’t yet started to accept mobile payments should definitely consider doing so.
Cryptocurrencies are also on the rise. These digital currencies can be used to buy services and goods online and are unique in that they’re not backed up by traditional currencies but are instead powered by blockchain. According to TechJury, the market size for cryptocurrency is expected to reach $1087 million by 2026.
According to Internet Retailing, 87% of consumers say that a long and complicated checkout process will make them abandon their shopping cart.
Your business depends on the customer’s ability to make an order, which means that your payment page needs to be optimized to be as simple as possible.
Customers appreciate a quick and efficient buying process, so if your competitor offers identical or similar products at the same prices, the only thing that will set you apart from them is the ease of payment.
Focus on how many different forms of payment you accept, including credit and debit cards, installments, and e-wallets, and consider offering loyalty programs and gift cards to encourage shoppers to return.
As people are becoming more and more accustomed to using different forms of technology, they will start to expect ease in transactions with retailers as well.
In order for your business to grow, you need to be able to understand your customers and know their expectations. Be sure to keep an eye on the payment processing trends and offer new payment opportunities personalized to your customers’ needs.